What Is a “Honeypot” Scam and How Is It Related to a Rug Pull?

A honeypot is a type of scam where the smart contract is coded to allow anyone to deposit funds but only the creator to withdraw them. It is a more insidious form of fraud than a standard rug pull.

While a rug pull involves removing existing liquidity, a honeypot prevents new investors from ever selling their purchased tokens, effectively trapping their capital. Both are exit scams that lead to total loss for investors.